5 4 Given $1,000.00, the following spot exchange rates, and assuming zero transaction costs,explain how you could use triangular arbitrage to profit on the disequilibrium in theforeign exchange market. The price of the euro (€) in terms of U.S. dollars is $1.20. Theprice of the British pound (£) in U.S. dollars is $1.30, and the cross rate between the €and the £ is 0.89 pounds per euro.

Answered: Image /qna-images/answer/c717c114-7eae-47a8-8f5f-0deaf056a6e7.jpg

Answered: 4. Given $1,000.00, the following spot…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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The 180-day interest rate in the United States is 12.25% per annum. The 180-day interestrate in Canada is 15.25% per annum. The Canadian dollar sells spot in New York forU.S. $.8203/Can$. The Canadian dollar sells 180 days forward in New York for U.S.$.8113.a. Are interest rates and forward rates in equilibrium?b. For a transaction size of U.S. $600,000, how can an investor take advantage of thesituation without taking undue risks? Ignore transaction costs and income taxes.
You have $750,000 in an IRA (Individual Retirement Account) at the time you retire. You have the option of investing this money in two funds: Fund A pays 3.7% annually and Fund B pays 6.2% annually. How should you divide your money between Fund A and Fund B to produce an annual interest income of $41,750? ..... You should invest $ in Fund A and $ in Fund B.
The new-car option: The new car costs $30,000 and can be financed with a three-year loan at 7.59%. The used-car option: A three-year old model of the same car costs $17,000and can be financed with a three-year loan at 7.71%. What is the difference in monthly payments between financing the new car and financing the used car?
If the inflation rate is 4% per year and the market interest rate is known to be 10% per year, what is the implied real interest (inflation-free) rate in this inflationary economy? The implied real interest (inflation-free) rate is%. (Round to two decimal places.)
Suppose it costs C$380 to purchase US$310.61. (a) What is the exchange rate? (b) How many U.S. dollars will you receive if you convert C$725 into U.S. dollars? (a) The exchange rate is C$1= US$. (Round to six decimal places as needed.) (b) C$725 = US$ (Round to two decimal places as needed.)
Company STU is starting a sinking fund for two future purchases. The risk free rate is 3.1%. They will need $600,000 in five years and another $800,000 in 12 years (from today). How much should they be saving per month if they were just saving for the first item? How much should they be saving per month if they were just saving for the second item? $ How much should they be saving per month if they wanted level payments for the two purchases? $ With level payments, will they have enough to buy the first item on schedule?
Mutual Fund X owns 0.5% of the total stock of Company Y. In one particular year, Company Y announces annual profits of $12,000,000, and decides to pay dividends to its shareholders at a rate of 15% of its annual profits. How much will Mutual Fund X receive in the form of dividends from Company Y? Give your answer in dollars.
Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $32,000 and can be financed with a five-year loan at 7.54%. The used-car option: A three-year old model of the same car costs $15,000 and can be financed with a four-year loan at 6.21%. What is the difference in monthly payments between financing the new car and financing the used car?
The APR for loans can also be approximated (however, not within the following formula: where APR = m = the number of payment periods per year I = the interest (or finance charge) P = the principal (amount financed) n = the number of periodic payments to be made. 2mI P(n + 1) Thus, if m= 12, I = $264, P = $1200 and n = 30, APR = Amount Financed $4000 % 2mI P(n + 1) Use the APR formula to find the APR to one decimal place. (Assume m = 12.) eBook Additional Materials 2 x 12 x 264 1200 x 31 = Finance Charge $354 = 17%. Number of Payments +|+ 12 4 of 1% accuracy required by Regulation Z+) by using the State the difference between the answer obtained by the formula and the answer obtained using the True Annual Interest Rate (APR) table. (Round your answer to one decimal place.) %
(Please draw cashflow diagram and don't use excel) A loan was to be amortized by a group of four end-of-year payments. The initial payment was to be P5,350 and will increase by P620 every year thereafter. But the loan was renegotiated to provide for the equal payment rather than uniformly varying sums. If the interest rate of the loan was 15% compounded semi-annually, what was the annual payment?
Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $26,000 and can be financed with a five-year loan at 6.44%. The used-car option: A three-year old model of the same car costs $18,000 and can be financed with a four-year loan at 7.21%. What is the difference in monthly payments between financing the new car and financing the used car? Use PMT = - nt 1- ..... The difference in monthly payments between financing the new car and financing the used car is $. (Round to the nearest cent as needed.)
Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $26,000 and can be financed with a three-year loan at 6.25%. The used-car option: A three-year old model of the same car costs $13,000 and can be financed with a five-year loan at 5.91%. What is the difference in monthly payments between financing the new car and financing the used car? Use PMT= The difference in monthly payments between financing the new car and financing the used car is $. (Round to the nearest cent as needed.) P(A) Р [₁-(₁ + -) -nt]

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